Oil price and rates shake investors

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The sharemarket fell yesterday as investors responded to rising
oil prices and ominous comments from the chairman of the US Federal
Reserve, Alan Greenspan.

FW Holst analyst Michael Heffernan said the local market was
affected by profit-taking and a lacklustre performance on markets
overseas.

Although the oil price was high it would probably be lower this
time next year, he said. The oil price rose to a record, about
$US70 a barrel, with fears it could go higher as Hurricane Katrina
threatens supply in the US.

The market also responded to comments by Dr Greenspan, who said
the central bank was focused on rising asset prices, which could
result in interest rate rises.

The ASX 200 index closed 55.7 points lower at 4396.8 while the
All Ordinaries index fell 50.5 points to 4368.6.

BHP Billiton fell 57c to $20.03 and Rio Tinto
dropped $1.32 to $50.10. Coal and copper miner Straits
Resources fell 5c to $2.21 after it said the second half was
looking positive and it would benefit from rising coal prices after
reporting a strong first half.

Woodside Petroleum rose 26c to $33.35 and Santos
jumped 26c to $11.82. Origin Energy fell 18c to $7.36 after
it said it expected its earnings to increase by 10 per cent this
financial year, after the transition to new international
accounting standards.